Loss to Lease Calculator

Loss to lease captures revenue left on the table because in-place leases were signed below current market. It's the single biggest value-add lever in multifamily underwriting — the gap you can close through turnover and renewals as rent control allows.

Market rent / unit / month

In-place rent / unit / month

Number of units

Annual loss to lease

$86,400

Monthly loss to lease

$7,200

Per-unit monthly gap

$180

Gap as % of market

10.00%

How the math works

Loss to lease = market rent − in-place rent. It measures the revenue a property is leaving on the table because existing leases were signed below current market. Typical at 2-5% during stable markets; can spike to 10-15% in rapidly appreciating markets.

On refinance or sale, lenders and buyers underwrite to market rent (not in-place) when projecting NOI — loss to lease is then converted into value-add opportunity and not an existing problem.

How to Use

Enter market rent per unit per month.
Enter in-place rent per unit per month.
Enter total number of units.
Read monthly and annual loss to lease.

Frequently Asked Questions

Healthy loss-to-lease?

2-4% is normal in a stable market. 5-10% indicates rising rents the operator hasn't pushed yet. 10%+ signals either rapid market growth, long-term leases, or passive management.

How to close the gap?

Push renewals at 5-8% (subject to local rent caps). Encourage turnover to mark-to-market. On rent-controlled properties, allowable increase is fixed — only turn gives mark-to-market.

Is loss to lease the same as concessions?

No. Loss to lease is market minus contract rent. Concessions are signing incentives (one month free). Both reduce effective revenue but are tracked separately in the NOI stack.